Analysis of 9 Data & Analytics M&A and Fundraising Deals - July 29-August 05, 2024
TL;DR - Takeover offers for Dun & Bradstreet, 23andMe and Tenable.
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August 2-5 - Data & Analytics provider Dun & Bradstreet explores a sale at a valuation of c.$9bn.
There have been rumours floating around for the past few months that some of the lower-performing listed Data & Analytics businesses may be on the market.
Last Friday a rumour circulated that Dun & Bradstreet was:
Working with investment bankers at Bank of America to evaluate takeover interest from potential buyers, which include private equity firms, the sources said.
D&B has a market capitalisation of c.$5bn with an additional $4bn of debt, giving it an enterprise value of $9bn.
On Monday the company confirmed that the game is, indeed, afoot:
While we do not comment on rumors or speculation, we believe it is important to note that Dun & Bradstreet has received inbound interest from third parties and has retained Bank of America to assist with those inquiries. The Board of Directors, with the assistance of Bank of America, takes seriously and evaluates all inquiries and strategic alternatives. There can be no assurance that any transaction or other alternative will result from these inquiries. Dun & Bradstreet does not intend to make further statements regarding this matter.
D&B is one of the oldest Data & Analytics providers around, founded originally in 1841 as The Mercantile Agency, and becoming R.G. Dun-Bradstreet in 1933.
It has birthed many other Data & Analytics businesses over the years, including Nielsen, Gartner, IMS Health (now part of IQVIA) and Moody’s.
These days D&B is probably best known for its DUNS Number system of company identifiers, and the Hoover’s Company Data & Analytics product.
Dun & Bradstreet listed its shares in New York in 2020, less than two years after an investor consortium led by CC Capital, Cannae and Thomas H. Lee Partners took it private.
The company's shares had lost nearly 62% of their value between its initial public offering and Thursday's close, as its debt pile limited its ability to invest in its business and profitability suffered.
Cannae still holds 15% of the listed stock.
Raymond James analyst Patrick O'Shaughnessy speculated in a note on Monday that S&P Global would make the most sense as potential acquirers.
O’Shaughnessy flags Moody’s, LSE Group, Experian, TransUnion and Equifax as other potential buyers.
Asymmetrix thinks that a PE-backed combination with fellow struggling Company Data & Analytics provider ZoomInfo (they missed their quarterly numbers recently) would make a lot of sense, although the debt pile may cause issues.
We will be keeping a close eye on this one as it progresses.
August 1 - Protect AI, a Seattle, WA-based artificial intelligence and machine learning security company, raised $60m in Series B funding at $400m valuation.
When Asymmetrix speaks to businesses about their use of AI, worries about providing access to their systems to AI providers usually arise fairly swiftly.
Protect AI assists companies in assessing the risks to their business of AI systems and their components. At the core of their product is Sightline:
An AI/ML threat feed derived from the unique supply chain research discovered by the 15K+ Protect AI huntr community.
Protect raised the money from Evolution Equity Partners with participation from 01 Advisors, StepStone Group, Samsung, and existing investors Acrew Capital, boldstart ventures, Knollwood Capital, Pelion Ventures, and Salesforce Ventures. To date, the company has raised a total of $108.5m.
Protect used some of the cash from the funding to acquire fellow AI risk mitigation provider Syde Labs.
With four acquisitions to date — Rebuff, Huntr, Laiyer AI, and Syde Labs — and a 300% year-over-year team growth, Protect AI plans to add 50 more employees by the end of 2024.
See our recent Thoughts on Artificial Intelligence in Data & Analytics for more thinking on trends around AI:
August 1 - ISI Markets, a provider of macroeconomic data, industry, company and sovereign intelligence, announced the acquisition of EPFR, a provider in fund flows and allocation data.
Given that both companies are owned by Montagu, a lower mid-market UK Private Equity firm, this is somewhat a case of robbing Peter to pay Paul.
EPFR was carved out from Informa PLC by Montagu in October 2022 and is the second acquisition by ISI Markets since Montagu acquired ISI in December 2020 and follows the acquisition of REDD Intelligence, the leading emerging market corporate and sovereign intelligence provider for high yield, private credit, distressed and event-driven special situations. ISI Markets also offers EMIS, the award-winning AI powered market intelligence and research platform.
On the other hand, putting the businesses together does make strategic sense and will give the combined entity more scale ahead of an exit in the not too distant future.
July 29 - August 1 - 23andMe and founder Anne Wojcicki are in negotiations for Anne Wojcicki to take the business private.
Back in April we flagged the vertiginous devaluation of Genetics Data & Analytics provider 23andMe, from a $6bn market cap to only a few hundred million, and the potential that CEO Anne Wojcicki was going to make an offer to acquire the whole business.
The last few days has seen some public to-ing and fro-ing between Anne Wojcicki and a special committee regarding an offer she has made to take the company private.
On Monday last week she offered $0.40 per share, valuing 23andMe at c.$190m.
On Friday the Special Committee of the Board of Directors responded that it was
disappointed with the proposal for multiple reasons, including because it provides no premium to the closing price per share on Wednesday, July 31st, it lacks committed financing, and it is conditional in nature. Accordingly, we view your proposal as insufficient and not in the best interest of the non-affiliated shareholders. Therefore, we are not prepared to move forward under the terms provided. Importantly, we request that you immediately withdraw your stated intent to oppose any alternative transaction so that we can fully assess whether there is interest from third parties in a transaction that would maximize value for all shareholders.
Our expectation after months of work was that you would submit a fully-financed, fully-diligenced, actionable proposal that is in the best interests of the non-affiliated shareholders. We understand that your potential sources of financing continue to analyze the opportunity and to do their due diligence. We further understand that these financing sources may be in a position in two weeks to present the opportunity to their respective investment committees. With that in mind, the Special Committee is prepared to provide you and your potential investors with a limited amount of additional time to submit a revised proposal in line with our expectation.
In other words, show us that you actually have the money and there might be a deal to be done.
We will continue to monitor events here.
July 30 - Tenable Holdings Inc. is exploring options including a potential sale after receiving takeover interest.
Here at Asymmetrix we are big fans of the Cyber Security Data & Analytics market, and have written about it repeatedly.
We’re not the only ones, and acquirers are sniffing out acquisition opportunities.
Tenable listed on Nasdaq back in 2018, 16 years after it was founded. Its market cap at the end of the first day of trading was just over $3bn.
The Columbia, Maryland-based security software company is working with advisers, the people said, asking not to be identified discussing confidential information.
Shares in Tenable, which have fallen about 9% over the past year, were trading at $44.14 each at 1:52 p.m. in New York on Tuesday, giving the cybersecurity firm a market value of about $5.25 billion.
Our guess is that the acquirer will be a large Private Equity firm. We’ll keep a close eye on this potential deal.
July 30 - Gradient AI, a provider of artificial intelligence (AI) solutions in the insurance industry, announced that it raised $56.1m in Series C funding.
At the heart of Insurance Data & Analytics provider Gradient is a “data lake comprising tens of millions of policies and claims [incoporating] numerous other features including economic, health, geographic, and demographic information”.
Gradient’s clients use the tools built on this dataset to predict underwriting and claim risks, reduce quote turnaround times and claim expenses.
The round was led by Centana Growth Partners, with participation from existing investors MassMutual Ventures, Sandbox Insurtech Ventures and Forte Ventures. The funds will be used to support product development to continue driving innovation and efficiency in the insurance industry and to further bolster customer success and sales functions.
One to watch.
July 30 - Credo AI, a Palo Alto, CA-based provider of AI governance software, raised $21m in funding. The round was led by CrimsoNox Capital, Mozilla Ventures, and FPV Ventures with participation from existing investors Sands Capital, Decibel VC, Booz Allen Hamilton, and AI Fund. This brings the company’s total funding raised to $41.3m.
Credo AI is similar in some ways to Protect AI above. Both help clients to monitor risks faced their businesses from the deployment of AI.
Expect to see many similar businesses arise over the coming months and years.
July 30 - Perchwell, a NYC-based provider of a modern data and workflow platform for residential real estate, raised $25m in Series B financing. The round was led by Lux Capital, joined by a group of strategic real estate and financial investors including Starwood Capital Group, Flex Capital, Stellar MLS, REcolorado MLS, and California Regional MLS (CRMLS).
Perhaps most interesting about this investment is the club of Regional Multiple Listing Services that have backed the business. Traditionally run and operated by local associations of realtors, a preliminary investigation of the MLS sector suggests that there are opportunities here to acquire and consolidate this highly fragmented market.
July 29 - osapiens, an ESG platform and provider of compliance and sustainability reporting solutions, raised $120m in Series B funding led by Growth Equity at Goldman Sachs Alternatives.
In just 6 years Mannheim, Germany-based osapiens has grown to over 300 employees serving 1,300 customers. The business tracks sustainability regulation internationally and enables clients to stay abreast of and comply with it.
It will be interesting to track osapiens and see where the business goes next. Although it has the potential to be a large company in its own right, combination with a business like Ecovadis, backed by Astorg and General Atlantic’s BeyondNetZero fund, would make a lot of sense.